Brokers’ call on Apollo Tyres, Hindalco

CLSA maintained 'Buy' on Apollo Tyres at a price target of Rs 110 on optimism from lower rubber prices both in India and abroad. "A 5% reduction in natural rubber costs points to a 14% increase in domestic Ebitda, 137bps improvement in margins and 16% increase in consol EPS," CLSA analysts said in a note.

Moreover, worries on declining volumes are "less critical" for Apollo since its more sensitive to rubber prices than to volumes. The analysts also see worries around the Competition Commission of India as "overdone," and feel valuations are reasonable at 7.7 times 2012-13 expected earnings and 1.3 times 2012-13 expected book value.

HSBC Retains 'Neutral' Rating on Hindalco

HSBC has retained its 'Neutral' rating on Hindalco Industries at a target price of Rs 130 on a lower than expected standalone EBITDA reported by the company for the June quarter.

Volumes were down in the quarter due to a planned shutdown at the copper smelter and unscheduled outage at aluminium smelters.